• David Poon

To Own Or To Rent?

Updated: Jul 14, 2019

In other developed countries, it is common to hear about people renting because they are shifting to another state to work. Due to the constant shifting of workplace, someone will choose not to own because they need to be mobile. In Singapore, home ownership is often considered as one of the more important achievements in life. In this day and age, with job mobility being on the rise, where people are deployed to other countries to work for years, does it still make sense to own or to rent?


Personally, I own and I rent. I own properties that give me positive cash-flow. I rent properties that give me positive cash-flow. For my own stay, I choose where I want to stay and I rent to stay.

Own?


Ownership provides some advantages over renting. In the event of en-bloc collective sale, owners are usually very happy, much more than the tenants. Ownership also allows you to take equity loans at low interest rates. Profit taking is possible when the value of the property goes up. If interest rates go down, your costs go down.


Rent?


Renting provides some advantages over owning. You do not have to pay management fees. Parking is "free" for most private properties. You might pay less money as a tenant if you rent a low yield, high cost property where the mortgage is higher than your rent. If interest rates go up, your rental cost remains the same. If there is any structural problem, the landlord bears the cost. If there is any other problems, you only have to pay a small amount, the landlord pays the rest.

In my opinion, there is a good reason to own and a good reason to rent. Just make sure that the numbers make sense and that you are happy staying where you are. Do not be overly concerned when people asks you "you mean you stay in a rental place?" because you know exactly what you are doing.


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